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A10
news
Guardian www.guardian.co.tt Friday, September 20, 2013
YVONNE WEBB
Many homeowners will be
in for an unpleasant surprise
when they go to pay their
land and building taxes
under the new scheme
announced by Finance Min-
ister Larry Howai.
In his budget presentation,
Howai proposed the return
of the tax in three phases over
the period 2014 to 2017.
Howai has proposed stake-
holder consultations and val-
uation of the properties dur-
ing this period, as the first
phase, which will value all
industrial land, including
plant and machinery, is set
to take effect on July 1, 2014.
The second phase proposes
a tax on commercial proper-
ties and residential and agri-
cultural properties will fall
into the third and final phase.
A deductible allowance to
provide relief to certain agri-
cultural land owners and low-
income homeowners is one
of the considerations put for-
ward.
But valuation surveyor Afra
Raymond points out that a
significant number of prop-
erties were assessed on the
basis of valuations that were
over 40 years old.
If those valuations are
updated, property values and
the resulting taxes will
increase sharply.
"What is more significant,"
Raymond added, "according
to official figures disclosed in
the 2009 budget, over
200,000 properties are not
on any property tax records
at all."
Raymond said at this point,
he did not have enough
details to comment properly
on how the valuations will
be undertaken, the length of
the process or costs.
Nor could he say how
much homeowners will be
expected to pay under the
new valuations.
Asked if the proposal is
reasonable and realistic, Ray-
mond---the president of the
Joint Consultative Council for
the Construction Industry
(JCC)---said it was long over-
due.
He noted: "In 1985 about
two per cent of the State s
tax income was via those
taxes. In 2009 that figure had
declined to 0.0018 per cent.
"Given the huge store of
wealth which we all know
that property represents, it
ought to be liable to some
significant taxation."
Opposition Leader Dr Keith
Rowley said: "If you own
property, you have to pay a
tax based on the valuation."
The Congress of the People
launched a popular "Axe the
Tax" campaign when the idea
was first proposed by the
People s National Movement
before the 2010 general elec-
tion.
Rowley, in his contribution
to the budget debate,
explained, "The law as passed
under the PNM had called
for a residential percentage
on your tax of 3.5 per cent.
This bill, laid in the Parlia-
ment and allowed to lapse,
has called for a 7.5 per cent
tax."
He said regardless of how
the Government tried to spin,
rename, rebrand or reposition
the land and building tax
scheme what they are rein-
troducing is property tax only
with a sharper increase in the
rate.
Raymond commented:
"One of the significant issues
is that the proposals originally
put forward by the PNM had
considerable merit, in my
view, but there was one area
which in those proposals were
backward-thinking.
"In my opinion, the PNM
had proposed that the funds
raised by their new property
tax were to go direct to the
Consolidated Fund," he said.
"The old arrangements had
those funds accruing directly
to the account of the five
municipalities (PoS, San Fer-
nando, Point Fortin, Chagua-
nas, Arima). That shift would
have totally denuded the
municipalities of even the
limited financial independ-
ence they have at this time.
"Under the old arrange-
ments (pre-2009) 15.75 per
cent of the municipalities
money came from property
taxes, but under the proposed
arrangements, all of that
money would have gone
direct to the account of cen-
tral government and the
municipalities would have
had only 2.16 per cent of their
money accruing independent
of central government.
"I am therefore fascinated
by the prospect of property
tax proposals emerging at the
same time as new local gov-
ernment arrangements and
the financial arrangements
are very important to discern
where the real power exists."
Valuation surveyor on land and building taxes:
Homeowners in for a shock
Afra Raymond